Last year, Donna invested her money in two purchases.

Question

Last year, Donna invested her money in two purchases. She purchased a certificate of deposit for
$2000
that paid
4%
interest per year and purchased
$6000
in corporate bonds paying
9%
interest per year.

 

(b) What was the percent interest for her total investment?

(a) What was the total interest earned at the end of 1 year? $

Answer 1

Even though you've listed it second, you need to do part a) before part b)

 

Simple interest is calculated by multiplying the amount invested P by the interest rate r times the number of years invested t.

I = P r t

 

a) The first investment has a principal of P = $2,000, r = 4% = 0.04, t = 1 yr

I = 2000 * 0.04 * 1

 

The second investment has a principal P = $6,000, interest rate r = 9% = 0.09 and time t = 1yr

I = 6000 * 0.09 * 1

 

Add these up to find your total interest.

 

b) The overall interest rate can be found by dividing

Total Interest / Total Invested

= (answer from a) / (2000 + 6000)